Venezuela: Democracy, Socialism and Imperialism

Introduction

Venezuela ’s President Hugo Chavez remains the
world’s leading secular, democratically elected political leader who
has consistently and publicly opposed imperialist wars in the Middle
East, attacked extra-territorial intervention and US and European
Union complicity in kidnapping and torture. Venezuela plays the major
role in sharply reducing the price of oil for the poorest countries in
the Caribbean region and Central America, thus substantially aiding
them in their balance of payments, without attaching any ‘strings’ to
this vital assistance. Venezuela has been in the forefront in
supporting free elections and opposing human right abuses in the Middle
East, Latin America and South Asia by pro-US client regimes in Iraq ,
Afghanistan and Colombia. No other country in the Americas has done
more to break down the racial barriers to social mobility and the
acquisition of land for Afro-Latin and Indio Americans. President
Chavez has been on the cutting edge of efforts toward greater Latin
American integration – despite opposition from the United States and
several regional regimes, who have opted for bilateral free trade
agreements with the US .

Even more significant, President Chavez is the only
elected president to reverse a US backed military coup (in 48 hours)
and defeat a (US-backed) bosses’ lockout, and return the economy to
double-digit growth over the subsequent 4 years.1 President Chavez is
the only elected leader in the history of Latin America to successfully
win eleven straight electoral contests against US-financed political
parties and almost the entire private mass media over a nine-year
period. Finally President Chavez is the only leader in the last
half-century who came within 1% of having a popular referendum for a
‘socialist transformation’ approved, a particularly surprising result
in a country in which less than 30% of the work force is made up of
peasants and factory workers.

President Chavez has drastically reduced long-term
poverty faster than any regime in the region,2 demonstrating that a
nationalist-welfare regime is much more effective in ending endemic
social ills than its neo-liberal counterparts. A rigorous, empirical
study of the socio-economic performance of the Chavez government
demonstrates its success in a whole series of indicators after the
defeat of the counter-revolutionary coup and lockout and after the
nationalization of petroleum (2003).

GDP has grown by more than 87% with only a small
part of the growth being in oil. The poverty rate has been cut in half
(from 54% in 2003 at the height of the bosses’ lockout to 27% in 2007;
and extreme poverty has been reduced from 43% in 1996 to 9% in 2007),
and unemployment by more than half (from 17% in 1998 to 7% in 2007).
The economy has created jobs at a rate nearly three times that of the
United States during its most recent economic expansion. Accessible
health care for the poor has been successfully expanded with the number
of primary care physicians in the public sector increasing from 1,628
in 1998 to 19,571 by early 2007. About 40% of the population now has
access to subsidized food. Access to education, especially higher
education, has also been greatly expanded for poor families. Real
(inflation adjusted) social spending per person has increased by more
than 300%. 3

His policies have once and for all refuted the
notion that the competitive demands of ‘globalization’ (deep and
extensive insertion in the world market) are incompatible with
large-scale social welfare policies. Chavez has demonstrated that links
to the world market are compatible with the construction of a more
developed welfare state under a popularly-based government.

The large-scale, long-term practical accomplishments
of the Chavez government, however have been overlooked by liberal and
social democratic academics in Venezuela and their colleagues in the US
and Europe, who prefer to criticize secondary institutional and policy
weaknesses, failing to take into account the world-historic
significance of the changes taking place in the context of a hostile,
aggressively militarist-driven empire.4

No reasonable and rigorous contemporary analysis can
seriously provide an accurate assessment of Venezuela while glossing
over the tremendous accomplishments achieved during the Hugo Chavez
presidency.

It is within the framework of Chavez’ innovative and
courageous political-social breakthroughs that we should proceed to an
analysis of the advances, contradictions and negative aspects of
specific political, economic, social and cultural policies, practices
and institutions.

The Advances and Limitations of Economic Policy

Venezuela has made tremendous advances in the
economy since the failed coup of April 11, 2002 and the employers’
lockout of December 2002-February 2003, which led to a 24% decline in
the GDP.5 Under President Chavez’ leadership and with favorable terms
of trade, Venezuela grew by over 10% during the past 5 years,
decreasing poverty levels from over 50% to less than 28%, surpassing
any country in the world in terms of the rate of poverty-reduction. The
economy has, in contrast to the past, accumulated over $35 billion
dollars in foreign exchange reserves despite a vast increase in social
spending and has totally freed itself of dependence on the onerous
terms imposed by the self-styled ‘international banks’ (IMF, World Bank
and Inter-American Development Bank) by paying off its debt.6

The government has nationalized strategic
enterprises in the oil and gas industries, steel, cement, food
production and distribution, telecommunications and electricity
industries. It has passed new excess profits taxes, doubling its
revenues. It has signed new petroleum and gas joint ventures with over
a dozen European, Asian and Latin American multinationals giving the
Venezuelan state majority control. It has expropriated several million
acres of uncultivated farm land from speculators and absentee owners
and, more recently, an additional 32 under-producing plantations.7 The
importance of these structural changes cannot be understated. In the
first place they increased the capacity of the Chavez government to
make or influence strategic decisions regarding investment,
re-investment, pricing and marketing. The increase in state ownership
increases the flow of revenues and profits into the federal treasury,
enhancing financing of productive investments, social programs and
downstream processing plants and services. The government is slowly
diversifying its petroleum markets from a hostile adversary (the USA )
to trade and investment with countries like China , Brazil , Iran and
Russia , thus reducing Venezuela ’s vulnerability to arbitrary economic
boycotts.

The government has started a large-scale, long-term
project to diversify the economy, and especially to become food
self-sufficient in staples like milk, meat, vegetables and poultry.8
Equally important investments in processing raw petroleum into
value-added products like fertilizers and plastics are now operative,
albeit at a slow pace. New refineries are on schedule to substitute
dependence on US based operations and to add value to their exports.
New public transport systems are advancing as is visible in the new
metro being built in Caracas , which will lessen the traffic jams and
air pollution. Over 2.5 billion Strong Bolivars, the new Venezuelan
currency (over $1 billion dollars) has been allocated in the form of
incentives, credit and subsidies to promote the increase in
agricultural production and processing.9 Investments in new lines of
production linked to social programs are underway, including new
enterprises manufacturing 15,000 prefabricated houses per year.10

Venezuela, like the rest of the world (China, EU,
USA, Australia and so on) is deeply affected by inflation, especially
of imported food. Inflation has escalated over the last 3 years rising
from 14% in 2005, to 17% in 2006 and 22% in 2007, threatening to
undermine the gains in living standards made over the last 5 years.11
Government attempts to impose price controls has had limited effect as
big food producers have cut back on production, food distributors have
decrease shipments and even hoarded essential goods and retail sellers
have traded on the black market. On the surface, the problem is that
consumer power has increased faster than productivity, increasing
demand relative to supply. However, the deeper structural reason is the
decline in capitalist investment in production and distribution –
despite high profits. Many capitalist food producers and food
processors have diverted their profits into investments in speculative
activity, including imports of luxury goods and real estate where there
is a higher rate of return. Some have lessened investment because of
opposition to the government, others because of fears of agrarian
reform, while all complain about ‘price controls’ leading to a ‘profit
squeeze’. These complaints do not account for low productivity, which
existed before price controls and continued even after the government
lifted the controls. Inflation and the resultant negative impact is one
of the principle reason for popular abstention during the December 2007
referendum and is the cause of popular discontent today in Venezuela .
Both the far right and the ultra-left (especially in some neighborhoods
and trade unions) have been exploiting this discontent.

Inflation is one of the principle reasons for the
decline of the popularity of various regimes (Left, Center and Right)
throughout history in Europe, as well as in Latin America .12 In large
part this is because the great majority of workers in Venezuela are
self-employed and have no organization or wage and income indexes to
keep up with the rise in prices. In Venezuela , even the major
industries, like petroleum, steel and aluminum, have ‘sub-contracted’
most of their workers who lack any power to negotiate for wage
increases tied to inflation. Government subsidies and promotional
incentives to industrial and agricultural capitalists to promote
productivity has led to increased profits – without commensurate
increases in wage income. During the period from February to April
2008, the state intervened directly in the productive process, through
the takeover of unproductive companies and farms. New worker and
peasant demands include ‘opening the books’ of the profitable firms and
farms in pursuit of wage and collective bargaining negotiations,
re-opening closed firms and investments in new public enterprises.
Chavez recognized that the problem of production (supply) will continue
to lead to too many Bolivars chasing too few consumer goods –
inflation, discontent and political vulnerability – unless he
accelerates the nationalization process and deepens public ownership.

To effectively intervene and take control of
strategic economic sectors, the government requires working class
organizations, cadres and leaders able to co-manage the enterprises,
‘opening the books’ on investments, profits and wages and establish
work discipline. Under present capital-labor relations, capitalists
totally neglect investment in technology and innovations, employ
temporary or contingent workers under precarious conditions and depend
on the Venezuelan state to enforce harsh labor codes.

In advancing the Bolivarian road to Socialism,
President Chavez has to deal with incompetent and reactionary officials
in his own government. For example, prior to Chavez’ nationalization of
the major steer multinational SIDOR, the Minister of Labor, an
incompetent and inexperienced functionary with no prior relation to
labor, sided with the company and approved of the Governor of the state
of Bolivar in calling out the National Guard to break the strike.
Throughout 2007-2008, management of SIDOR refused to negotiate in good
faith with the unions, which provoked strikes in January in February
and March 2008. The intransigence of the steel bosses increased the
militancy of the workers and led to Chavez’ intervention. In defense of
his order to nationalize, Chavez cited the positive role of the steel
workers in opposing the coup, the ‘slave-like’ work conditions and the
export strategies, which denied the domestic construction industry the
steel it needed for high-priority homebuilding. He called on the
nationalized industry to be run under ‘workers councils’ in a efficient
and productive manner.13

Government repression of strikes provoked regional
union solidarity and worker-led marches against the National Guard and
calls for the resignation of the ineffective Labor Minister. After
Chavez nationalized steel, trade unions from major industrial sectors
met to coordinate support for President Chavez and press for further
moves toward public ownership. Equally ominous, brutality and excess
use of force ordered by the general in charge of the National Guard is
indicative of a profoundly anti-working class, pro-big business bias of
the Guard officers, a potentially dangerous threat to the Chavez
government in the future.14 By confronting the problem of inflation and
the overvalued, strong Venezuelan Bolivar Chavez is dealing with an
issue that is real and deeply felt by most workers. Failure by the
government to deal with its structural roots makes it vulnerable to
demagogic appeals by the right and the sectarian ultra-left and its
principle beneficiary, the US imperialism.

New public investments in fertilizer plants,
prefabricated housing, positive measures reducing inflation by one
third in the first 2 months of 2008 and policies sharply increasing
food supply by 20% indicate that the Chavez government is beginning to
confront some of the economy’s weak points. In visits to several public
and private retail markets during the last part of February and early
March, we did not find any shortages of essential items, contrary to
the opposition, and the US and European media reports. An opposition
organized protest of shortages of liquid gas in Catia (a popular
neighborhood in Caracas ) was front-page news (with blown-up photos) in
the opposition daily, El Universal, but with no follow up reports when
the government sent in supplies the next day.15

By the beginning of 2008, public spending, which is
not always efficiently invested or entirely free of corruption, reduced
unemployment 8.5%, the lowest in decades.16 However a government goal
of 5.5% seems over optimistic, especially in light of the fall-out from
the US recession and decline in European demand.

The big challenge to Chavez’ economic policy in
2008, a year of important state and local elections in November, is to
ensure that the inevitable mid-year increase in public spending is
directed toward productive investments and not to populist short-term
programs, which will ignite another wave of inflation. We can expect
that, as the elections approach, the capitalist class will once again
resort to ‘planned shortages’, distribution blockages, as well as other
politically induced economic problems in order to blame and discredit
the government. Unless the government reduces its reliance on the
private sector for investments, employment, production, finance and
distribution, they will be forced into taking costly and improvised
measures to avoid electoral losses and popular abstention. The
indivisible ties between private business control over strategic
economic decisions and their paramount interest in pursuing political
measures designed to undermine the Chavez government, means that the
government will remain under constant threat unless it takes control of
the commanding heights of the economy. In recognition of those
structural factors Chavez has announced plans to nationalize strategic
sectors. The Chavez government has become pro-active, anticipating
shocks from the economic elite and displacing them from power.
Depending on the private sector will force the government to continue
to be ‘reactive’, improvising responses to economic attacks during and
after the fact and suffering the negative political consequences.

Politics: The Chavistas Strike Back

During the latter half of 2007, in the run-up to the
referendum, and early 2008, the rightwing offensive (aided by the
ultra-left) took hold and put the government on the defensive. Early
March 2008, the pro-Chavez forces regrouped and launched a new
political party – The Venezuelan United Socialist Party (PSUV) at a
national convention in Maracaibo . In response to the defeat of the
referendum, President Chavez called on his supporters to engage in a
‘Three R’s Campaign’: Review, Rectify and Re-launch. This initiative
has led to the election of new party leaders, a decline in old guard
paternalistic bosses in the leadership of the PSUV, a rejection of
sectarianism toward other pro-Chavez parties and a revitalization of
grass roots activism.17 The party is intended to oversee the
mobilization of the Chavez supporters and to educate and organize
potential working and lower middle class constituents. The party is
mandated to evaluate, criticize and correct the implementation of
policies by local officials and engage the mass social movements in
common struggle. To succeed the party must organize local popular power
to counter-act corrupt Chavez-affiliated as well as opposition
policy-makers, press local demands and initiatives, counter rightwing
infiltration of neighborhoods by Colombian and local terrorists and
turn out the vote at election time.

For the PSUV to succeed as a political organization
it needs to take power away from the local clientelistic political
machines built around some of the state, regional and municipal level
Chavista officials. It needs to overcome the tendency to appoint
leaders and candidates from above and to deepen rank and file control
over decisions and leaders.18 Even during the founding congress of the
PSUV several delegations criticized the process of electing the
national leadership – for neglecting popular representation and
overloading it with much criticized political officials.19

Active communal councils under democratic control
have been effective in giving voice and representation to a large
number of urban and poor neighborhoods. They have secured popular
loyalty and support wherever they have delivered needed services and
led struggles against incompetent or recalcitrant Chavista officials.

Violence, crime and personal insecurity are major
issues for most poor and lower middle class supporters of the Chavez
government and the police are viewed as ineffective reducing crime and
securing their neighborhoods and as, at times, complicit with the
gangsters.20 Proposals by the government for greater cooperation
between neighborhood committees and the police in identifying criminals
have had little effect. This is in part because police have shown
little interest in developing on-the-ground, day-by-day relations in
the poorer barrios, which they tend to view as ‘criminal breeding
grounds’.

Armed gangs controlling the poor neighborhoods
commit most of the crime. Local residents fear retaliation if they
cooperate or worse, they think that the police are complicit with the
criminals. Even more seriously reports from reliable intelligence
sources have identified large-scale infiltration of Colombian death
squad narco traffickers who combine drugs peddling and rightwing
organizing, posing a double threat to local and national security.
While the government has taken notice of the general problem of
individual insecurity and the specific problem of narco-political
infiltration, no national plan of action has yet been put into
practice, apart from periodic routine round-ups of low-level common
criminals.21

Venezuela should learn from the example of Cuba,
which has had successful crime fighting and anti-terrorist programs for
decades organized around a tight network of local ‘committees to defend
the revolution’ and backed by a politically trained rapid action
internal security force and an efficient judiciary. Individual security
and political freedom depends on the collective knowledge of crime
groups’ infiltration and the courage of local committees and
individuals. Their cooperation requires trust in the integrity, respect
and political loyalty of the internal security forces. Their
intelligence, evidence collection and testimony depend on the
protection of local citizens by the internal security forces against
gangster retaliation.

A new type of ‘police official’ needs to be created
who does not view the neighborhood and its committees as hostile
territory – they must live and identify with the people they are paid
to protect. To be effective at the local level, the Chavez government
must display exemplary behavior at the national level: It must
prosecute and jail criminals and not grant amnesty or give light
sentences to coup-makers and economic saboteurs, as Chavez did in early
2008. The failure of the current Attorney General to pursue the
murderers of her predecessor, Attorney General Danilo Anderson, was not
only a shameful act but set an example of incompetent and feeble law
enforcement which does not create confidence in the will of the state
to fight political assassins.22

‘Popular power’ will only become meaningful to the
mass of the poor when they feel secure enough to walk their streets
without assaults and intimidation, when the gangs no longer break into
homes and local stores, and when armed narco-traffickers no longer
flaunt the law. In Venezuela , the struggle against the oligarchs,
George Bush and Colombia ’s Uribe begins with a community-based war
against local criminals, including a comprehensive tactical and
strategic sweep of known criminal gangs followed by exemplary
punishment for those convicted of terrorizing the residents. This is
one way to make the government respected at the grass roots level and
to re-assert and make operative the term popular sovereignty. In every
barrio today it is not only the ‘right wing NGO’s’, which challenge
Chavez’ authority, it is the armed criminal elements, increasingly
linked with reactionary political groups. To successfully confront the
external threats, it is incumbent on the government to defeat the
gangsters and narco-traffickers that represent a real obstacle to mass
mobilization in time of a national emergency, like a new coup attempt.

Failures by some middle level Chavez officials to
ensure security and resolve local problems have eroded popular support
for political incumbents. The majority of local residents, popular
leaders and activists still voice support for President Chavez even as
they are critical of the ‘people around him’, ‘his advisers’, and ‘the
opportunists’.23 How this will play out in the November election is not
totally clear. But unless fundamental changes take place in candidates
and policies, it is likely that the opposition will increase their
current minimal representation in state and municipal governments.

Social and Cultural Advances and Contradictions

Venezuela , under the leadership of President
Chavez, has made unprecedented social and cultural changes benefiting
the broad majority of the urban and rural poor, and working and lower
middle classes. Nine new Bolivarian universities and dozens of
technical schools have been established with over 200,000 students.24
Over 2.5 million books, pamphlets and journals have been published by
the new state-financed publishing houses, including novels, technical
books, poetry, history, social research, natural sciences, medical and
scientific texts.25 Two major television studios and
communitarian-based TV stations provide international, national and
local news coverage that challenges opposition and US-based (CNN)
anti-government propaganda. A major news daily, Vea, and several
monthly and weekly magazines debate and promote pro-Chavez politics.26
Several government-funded missions, composed of tens of thousands of
young volunteers, have reduced urban and (to a lesser degree) rural
illiteracy, extended health coverage, while increasing local
participation and organization in the urban ‘ranchos’ or shantytowns.
Major cultural events, including musical, theater and dance groups
regularly perform in working class neighborhoods. The Ministry of
Culture and Popular Power has initiated a vast number of overseas and
local programs involving the Caribbean and Latin American countries.27
Sports programs, with the aid of Cuban trainers, have received large
scale government funding for physical infrastructure (gymnasiums,
playing fields, uniforms and professional trainers) and have vastly
increased the number of athletes among the urban poor. Major funding to
defend and promote indigenous and Afro-Venezuelan culture is in the
works, and some movement to ‘affirmative action’ is envisioned, though
cultural representation in fields other than sports, music and dance is
still quite limited. There is no question that Venezuela is going
through a ‘Cultural Revolution’ – reconstructing and recovering its
popular, historical and nationalist roots buried below the frivolous
and imitative artifacts of a century of culturally colonized oligarchs
and their middle class followers.

Cultural Contradictions and Challenges

While the Venezuelan cultural reformation has made a
massive impact in raising educational and cultural levels, it has not
yet decisively displaced the cultural hegemony of the bourgeoisie and
US imperialism. The latter still holds sway over the vast majority of
the upper and affluent middle class professionals, Central University
academics and students, and important sectors of the public and
especially private professional groups (doctors, lawyers, publicists,
engineers etc). Despite substantial pay increases and additional
stipends, these middle class professionals still cling to their
reactionary beliefs in a fit of ‘status panic’.

President Chavez, speaking at the first graduating
class of the new inclusive (open admission) Venezuelan Bolivarian
University, cited a doctoral thesis which found that 94% of students at
the tax-payer funded elite ‘public’ university, Venezuelan Central
University (UCV), were from the upper and middle class, while 99% of
the students at the private Simon Bolivar University (SBU) were from
the same privileged classes. What was especially disturbing was the
increasingly exclusive and privileged nature of the UCV and SBU: in
1981 the UCV enrolled 21% from the lower classes compared to 6.5% in
2000; the SBU went from 13% to 1% in the same period. To open higher
education to the working class, the poor and the peasants, the Chavez
government has begun the construction of 29 public universities,
upgrading 29 vocational-technical schools into Polytechnic
Universities, and increasing the number of full scholarships from 6,000
to 10,000.

While the vast number of lower class neighborhoods
and individuals have benefited from state health, educational and
cultural programs, popular education in creating collective solidarity
and class consciousness still has had a limited impact. Some
individuals from the lower class who had set up economic cooperatives
were either incapable of operating them or absconded with state funds.
Similar theft and corruption afflicted some of the ‘missions’, where
poor accounting practices facilitated waste and losses. Populist
paternalism and official negligence (and corruption) weakened the
effort to create a new nationalist class-consciousness linked to a new
popular hegemony. On the other hand, President Chavez’ intervention in
nationalizing the steel industry during the labor-capital dispute
heightened class-consciousness and factory worker identification with
the Venezuelan road to socialism.

Over the past 5 years the state-financed television
programs have greatly improved in terms of their professionalism and
programming. They still have not fully overcome the continued hegemonic
hold of the bourgeois media over sectors of the popular majority. In
terms of entertainment and breaking news coverage, especially during
the run-up and the day of the December 2, 2007 referendum, the
bourgeois media dominated public attention due, in large part, to the
absence of pro-government media coverage.

One of the least effective pro-government print
media is the daily newspaper Vea, which is read by few people because
of its poor news reporting (big headlines, no content) and mediocre
columns and essays. The Minister of Culture and Popular Power told me
that substantial changes would soon take place.28 The wide reaching
cultural programs have improved cultural levels but has not led to the
growth of mass Chavista cultural movements. Less than 10% of the
students at the Central University of Venezuela (UCV) are active
members of Chavista student movements or affiliated organizations
(according to a Chavista student leader), despite significant
improvements in university salaries and facilities.29 Apparently family
and class identification takes precedence over cultural egalitarianism.
The vast majority of students and professors at the UCV are apolitical,
indifferent or into strictly vocational training and individual
mobility. An active minority supports opposition groups; some are
linked to US universities and CIA-funded ‘leadership training’ programs
while small Trotskyist, Maoist and other sects agitate against the
government.

The emergence of the autonomous pro-Chavez communal
councils, linked to the Ministry of Culture and Popular Power, is
probably the most effective counter-hegemonic movement. The political
and social activities of party activists and leaders of the PSUV can
succeed in creating a new class consciousness so long as they involve
the masses in solving their own practical problems and assume local
responsibility for their actions. Chavista cadres, which act
paternally, create patron-client consciousness vulnerable to quick
switches to oligarchic-client relations. The key contradiction in the
cultural reformation is in the ‘middle class’ Chavista configuration
which carries over its paternal orientation in implementing its ‘class
conscious programs to the popular classes.

There is a great need for recruitment and education
of young local cadres from the barrios, who speak the language of the
people and have the class bonds to integrate the masses into a
nationalist and socialist cultural-social program. The government’s
cultural and popular power movement is a formidable force but it faces
tenacious opposition from the virulent and disreputable mass media
aligned with the oligarchy. As the Venezuelan process moves toward
egalitarian socialist values, it faces the more subtle but more
insidious opposition of middle class students, professors and
professionals who in the name of ‘liberal democracy’ and ‘pluralism’
seek to destroy cultural class solidarity. In other words, we have a
struggle between the progressive minority from the middle class in the
government against the majority of reactionary liberal middle class
individuals embedded in academic institutions and in the
community-based NGO’s. Only by gaining the support of the people
outside the middle class, that is, the radical and exploited popular
classes, can the cultural reformists in the Culture Ministry create a
dominant popular hegemony.

Social Change: the Struggle of Popular Social Movements versus the Reactionary Middle Class Movements

To discuss the highly polarized social confrontation
between the pro-Chavez popular movements and the US-backed
oligarch-supported middle class movements, it is important to
contextualize the social, political and economic relations, which
preceded the ascendancy of the Chavez government. The United States was
the key determinant of the economic conditions and the principle point
of reference of Venezuela ’s oligarchy and middle class. US-Venezuelan
relations were based on US hegemony in all spheres – from oil to
consumerism, from sports to life style, from bank accounts to marriage
partners. The role models and life styles of the Venezuelan middle
class were found in the upscale Miami suburbs, shopping malls, condos
and financial services. The affluent classes were upper class
consumers; they never possessed a national entrepreneurial vocation.

The oil contracts between US and European firms and
the PDVSA were among the most lucrative and favorable joint ventures in
the world. They included negligible tax and royalty payments and long
term contracts to exploit one of the biggest petroleum sites in the
world (the Orinoco ‘tar belt’). The entire executive leadership of what
was formally described as a ‘state enterprise’ was heavily engaged in
dubious overseas investments with heavy overhead costs, which disguised
what was really executive pillage and extensive cost overruns, that is,
massive sustained corruption.30 From the senior oil executives, the
pillaged oil wealth flowed to the upper middle class, lawyers,
consultants, publicists, media and conglomerate directors, a small army
of upscale boutique retailers, real estate speculators and their
political retainers and their entourage among middle level employees,
accountants, military officials, police chiefs and subsidized academic
advisers. All of these ‘beneficiaries’ of the oil pillage banked their
money in US banks, especially in Miami, or invested it in US banks,
bonds and real estate. In a word, Venezuela was a model case of a
rentier-bureaucratic ruling class profoundly integrated into the US
circuits of petroleum-investment-finance. Systematically, culturally
and ideologically they saw themselves as subordinate players in the US
‘free trade-free market’ scheme of things. Chavez’ assertions of
sovereignty and his policies re-nationalizing Venezuelan resources were
seen as direct threats to the upper-middle class’ essential ties to the
US , and to their visions of a ‘ Miami ’ life style.

This deep subordinated integration and the colonized
middle class values and interests that accompanied it, was deeply
shaken by the crash in the Venezuelan economy throughout the 1980’s and
1990’. Emigration and relative impoverishment of a wide swath of pubic
employees, professionals and previously better-paid workers seemed to
‘radicalize’ them or create widespread malaise. The profound downward
mobility of the impoverished working class and lower-middle class, as
well as professionals, led to the discredit of the endemically corrupt
leaders of the two major political parties, mass urban riots, strikes
and public support for an aborted Chavez-led military uprising (1992).
These events led to his subsequent election (1998) and the approval of
the referendum authorizing the writing of a new, more profoundly
democratic constitution. Yet the middle class rebellion and even
protest vote in favor of Chavez, was not accompanied by any change in
political ideology or basic values. They saw Chavez as a stepladder to
overcome their diminished status, and paradoxically, to refinance their
‘ Miami ’ life-style, and gain access to the US consumer market.

Time and circumstance would demonstrate that when
push came to shove, in November 2001-April 2002, when the US confronted
and was complicit in the short-lived, but failed coup, the bulk of the
middle class backed the US-Venezuelan elite.31 The US-backed coup was a
direct response to President Chavez’ refusal to support the White
House-Zionist orchestrated ‘War on Terror’. Chavez declared, ‘You don’t
fight terror with terror’ in answer to President Bush’s post-September
11, 2001 call to arms against Afghanistan . This affirmed Chavez’
principled defense of the rights of self-determination and his
unwavering stand against colonial wars. US Undersecretary of State for
Political Affairs, Mark Grossman personally led an unsuccessful mission
to Caracas in the fall of 2001 to pressure Chavez to back down.32
Chavez was the only president in the world prepared to stand up to the
new militarist Bush doctrine and thus was designated an enemy. Even
worse, from the point of view of the Bush Administration, President
Chavez’ nationalist policies represented an alternative in Latin
America at a time (2000-2003) when mass insurrections, popular
uprisings and the collapse of pro-US client rulers (Argentina, Ecuador
and Bolivia) were constant front-page news.

In the run-up to the April 2002 coup, the policies
of the Chavez government were extremely friendly to what are reputed to
be ‘middle class’ values and interests — in terms of democratic
freedoms, incremental socio-economic reforms, orthodox fiscal policies
and respect for foreign and national property holdings and capitalist
labor relations. There were no objective material reasons for the
middle classes or even the economic oligarchy to support the coup
except for the fact that their status, consumerist dreams, life style
and economic investments were closely linked with the United States .
In a word, the US exercised near complete hegemony over the Venezuelan
upper and middle classes. As a result, its policies and its global
interests became identified as ‘the interests’ of the wealthy
Venezuelans. Venezuelan elite identification with US policy was so
strong that it compelled them to back a violent coup against their own
democratically elected government. The Caracas ruling class supported
the imposition of an ephemeral US-backed dictatorial political regime
and an agenda, which, if fully implemented, would have reduced their
access to oil revenues, and the trade and socio-economic benefits they
had enjoyed under Chavez. The brief coup-junta proposed to withdraw
from OPEC, weakening Venezuela’s bargaining position with the US and
EU, expel over 20,000 Cuban physicians, nurses, dentists and other
health workers who were providing services to over 2 million low income
Venezuelans without receiving any reciprocal compensation from
Washington. 33

The economic elite and the middle class’s second
attempt to overthrow President Chavez began in December 2002 with a
bosses and oil executive lockout. This lasted until February 2003 and
cost over $10 billion dollars in lost revenues, wages, salaries and
profits.34 Many Venezuelan businessmen and women committed economic
suicide in their zeal to destroy Chavez; unable to meet loan and rent
payments, they went bankrupt. Over 15,000 executives and professionals
at the PDVSA, who actively promoted the strike and, in a fit of elite
‘Luddite’ folly, sabotaged the entire computerized oil production
process, were fired. The principal pro-US and long time CIA funded
trade union confederation suffered a double defeat for their
participation in the attempted coup and lockout, becoming an empty
bureaucratic shell. The upper and middle classes ultimately became
political and social losers in their failed attempts to recover their
‘privileged status’ and retain their ‘special relation’ with the US .
While the privileged classes saw themselves as ‘downwardly mobile’ (an
image which did not correspond with the reality of their new wealth
especially during the commodity boom of 2004-2008), their frustrations
and resentments festered and produced grotesque fantasies of their
being ruled by a ‘brutal communist dictator’. In fact, under Chavez’
presidency (after 2003), they have enjoyed a rising standard of living,
a mixed economy, bountiful consumer imports and were constantly
entertained by the most creatively hysterical, rabidly anti-government
private media in the entire hemisphere. The media propaganda fed their
delusions of oppression. The hardcore privileged middle-class minority
came out of their violent struggle against Chavez depleted of their
military allies. Many of their leaders from the business associations
and moribund trade union apparatus were briefly imprisoned, in exile or
out of a job.

On the other hand, the pro-Chavez mass supporters
who took to the streets in their millions and restored him to the
Presidency and the workers who played a major role in putting the oil
industry back in production and the factories back to work, provided
the basis for the creation of new mass popular movements. Chavez never
forgot their support during the emergency. One of the reasons he cited
for nationalizing the steel industry was the support of the steel
workers in smashing the bosses’ lockout and keeping the factories in
operation.

Venezuela is one of the few countries where both the
Left and the Right have built mass social movements with the capacity
to mobilize large numbers of people. It is also the country where these
movements have passed through intense cyclical volatility. The tendency
has been for organizations to emerge out of mass struggle with great
promise and then fade after a ‘great event’ only to be replaced by
another organized ‘movement’, which, in turn, retains some activists
but fails to consolidate its mass base. In effect what has been
occurring is largely sequential movements based on pre-existing class
commitments which respond in moments of national crises and then return
to everyday ‘local activities’ around family survival, consumer
spending, home and neighborhood improvements. While this cycle of
mobilization ‘ebb and flow’ is common everywhere, what is striking in
Venezuela is the degree of engagement and withdrawal: the mass
outpouring and the limited number of continuing activists.

Looking at the big picture over the past decade of
President Chavez’s rule, there is no question that civil society
activity is richer, more varied and expressive than during any other
government in the last sixty years.

Starting from the popular democratic restoration
movement that ousted the short-lived military-civilian junta and
returned Chavez to power, local community based movements proliferated
throughout the ranchos (slums) of the big cities, especially in Caracas
. With the bosses lockout and actual sabotage, the factory and oil
field workers and a loyal minority of technicians took the lead in the
restoration of production and defeating the US-backed executive elite.
The direct action committees became the nuclei for the formation of
communal councils, the launching of a new labor confederation (UNT),
and new ‘electoral battalions’, which decisively defeated a referendum
to oust Chavez. From these ‘defensive organizations’ sprang the idea
(from the government) to organize production cooperatives and
self-governing neighborhood councils to by-pass established regional
and local officials. Peasant organizing grew and successfully pressured
for the implementation of the land reform law of 2001. As the left
organized, the right also turned to its ‘normal institutional base’ –
FEDECAMARAS (the big business association), the cattle and large
landowner organizations, the retailers and private professionals in the
Chambers of Commerce and toward neighborhood organizations in the
up-scale neighborhoods of the elite centered in Altimar and elsewhere.
After suffering several demoralizing defeats, the right increasingly
turned its attention toward US funding and training from NGO’s, like
SUMATE, to penetrate lower class barrios and exploit discontent and
frustrations among the middle class university students whose street
demonstrations became detonators of wider conflicts.35

The Chavistas consolidated their organizational
presence with health clinics, subsidized food stores and coops and
educational programs. The Right consolidated its hold over the major
‘prestigious’ universities and private high schools. Both competed in
trying to gain the allegiance of important sectors of the less
politicized, sometimes religious low-income informal workers and higher
paid unionized workers – both focused on immediate income issues. The
Chavistas secured nearly 50% of the vote among the voters in a radical
referendum spelling out a transition to socialism, losing by 1%. The
right wing capitalized on the abstention of 3 million, mostly
pro-Chavez, voters to defeat the referendum.36

The right wing, via violence and sustained
disinvestment in the country has polarized Venezuela despite nearly
double-digit sustained growth over a 5 year period. This basic
contradiction reflects the fact that the ‘socialist’ project’ of the
government takes place in the socio-economic framework in which big
capitalists control almost all the banking, financing, distribution,
manufacturing, transport and service enterprises against the
gas-oil-telecom, electricity, steel, cement and social service sectors
of the government. In April 2008, Chavez launched a major offensive to
reverse this adverse correlation of economic power in favor of the
working classes by expropriating 27 sugar plantations, food
distribution networks, meat packing chains, as well as the major cement
and steel complexes.

In 2008 Chavez recognized that the populace
mobilized ‘from below’ was stymied by the ‘commands’ issued by the
economic elite ‘from above’. Whether it is food distribution or
production, job creation or informal/contingent employment, funding
small farmers or speculative landlords trading in bonds or financing
oil derivative plants – all of these strategic economic decisions which
affect class relations, class organization, class struggle and class
consciousness were in the hands of the mortal enemies of the Chavez
government and its mass base. By directly attacking these crucial areas
affecting everyday life, Chavez is revitalizing and sustaining mass
popular organization. Otherwise to remain subject to elite economic
sabotage and disinvestment is to demoralize and alienate the popular
classes from their natural gravitation to the Chavez government.

US-Venezuelan Relations

More than in most current Latin American societies,
the Venezuelan ruling and middle classes have demonstrated a
willingness to sacrifice their immediate economic interests, current
remunerative opportunities, lucrative profits and income in pursuit of
the high risk political interests of the US . How else can one explain
their backing of the US-orchestrated coup of April 2002 at a time when
Chavez was following fairly orthodox fiscal and monetary policies, and
had adopted a strict constitutionalist approach to institutional
reform? How else can one explain engaging in an executive and bosses
2-month lockout of industry and oil production, leading to the loss of
billions in private revenues, profits and salaries and ultimately the
bankruptcy of hundreds of private firms and the firing of over 15,000
well-paid senior and middle level oil executives?

Clearly the ‘ultra-hegemony’ of the US over the
Venezuelan elite and middle class has a strong component of
ideological-psychological self-delusion: a deep, almost pathological
identification with the powerful, superior white producer-consumer
society and state and a profound hostility and disparagement of ‘deep
Venezuela ’ – its Afro-Indian-mestizo masses.

Typifying Theodor Adorno’s ‘authoritarian
personality’, the Venezuelan elite and its middle class imitators are
at the feet and bidding of those idealized North Americans above and at
the throat of those perceived as degraded dark-skinned, poor
Venezuelans below. This hypothesis of the colonial mentality can
explain the pathological behavior of Venezuelan professionals who, like
its doctors and academics, eagerly seek prestigious post-graduate
training in the United States while disparaging the ‘poor quality’ of
new neighborhood clinics for the poor where none had existed before and
the new open admission policies of the Bolivarian universities – open
to the once marginalized masses.

The deep integration – through consumption,
investments and vicarious identification – of the Venezuelan upper and
middle classes with the US elite forms the bed-rock of Washington ’s
campaign to destabilize and overthrow the Chavez government and destroy
the constitutional order. Formal and informal psychosocial ties are
strengthened by the parasitical-rentier economic links based on the
monthly/yearly consumer pilgrimages to Miami . Real estate investments
and illegal financial transfers and transactions with US financial
institutions, as well as the lucrative illegal profit sharing between
the former executives of PDVSA and US oil majors provided the material
basis for pro-imperialist policies.

US policy makers have a ‘natural collaborator class’
willing and able to become the active transmission belt of US policy
and to serve US interests. As such it is correct to refer to these
Venezuelans as ‘vassal classes’.

After the abject failures of Washington ’s vassal
classes to directly seize power through a violent putsch and after
having nearly self-destructed in a failed attempt to rule or ruin via
the bosses’ lockout, the US State Department oriented them toward a war
of attrition. This involves intensified propaganda and perpetual
harassment campaigns designed to erode the influence of the Chavez
government over its mass popular base.

Imperial academic advisers, media experts and
ideologues have proposed several lines of ideological-political
warfare, duly adapted and incorporated by the Venezuelan ‘vassal
classes’. This exercise in so-called ‘soft-power’ (propaganda and
social organizing) is meant to create optimal conditions for the
eventual use of ‘hard power’ – military intervention, coup d’etat,
terror, sabotage, regional war or, more likely, some combination of
these tactics.37 The predominance of ‘soft power’ at one point in time
does not preclude selective exercises of ‘hard power’ such as the
recent Colombian cross-border military attack on Venezuela ’s ally
Ecuador in March 2008. Soft power is not an end in itself; it is a
means of accumulating forces and building the capacity to launch a
violent frontal assault at the Venezuelan government’s ‘weakest moment’.

Imperial-Vassal Three Part ‘Soft Power’ Campaign: Drugs, Human Rights and Terrorism

In the period between 2007-2008, the US and the
Venezuelan elite attempted to discredit the Venezuelan government
through the publication and dissemination of a report fabricated to
paint Venezuela as a ‘narco-center’. A DEA (US Drug Enforcement Agency)
report named Venezuela as a ‘major transport point’ and ignored the
fact that, under Washington ’s key client in Latin America President
Alvaro Uribe, Colombia is the major producer, processor and exporter of
cocaine, is beyond bizarre. Blatant omissions are of little importance
to the US State Department and the private Venezuelan mass media. The
fact that Venezuela is successfully intercepting massive amounts of
drugs from Colombia is of no importance. For US academic apologists of
empire, lies at the service of destabilizing Chavez are a virtuous
exercise in ‘soft power’.38

The US, its vassal classes and the
Washington-financed human rights groups have disseminated false charges
of human rights abuses under Chavez, while ignoring US and Israeli
Middle East genocidal practices and the Colombian government’s
long-standing campaigns of killing scores of trade unionists and
hundreds of peasants each year. Washington ’s attempt to label
Venezuela as a supporter of ‘terrorists’ was resoundingly rejected by a
United Nation’s report issued in April 2008.39 There is no evidence of
systematic state sponsored human rights violations in Venezuela . There
are significant human rights abuses by the opposition-backed big
landowners, murdering over 200 landless rural workers. There are
workplace abuses by numerous FEDECAMARAS-affiliated private
employers.40 It is precisely in response to capitalist violations of
workers rights that Chavez decided to nationalize the steel plants. No
doubt Washington will fail to properly ‘acknowledge’ these human rights
advances on the part of Chavez.

The point of the ‘human rights’ charges is to
reverse roles: Venezuela, the victim of US and vassal class’ coups and
assassinations is labeled a human rights abusers while the real
executioners are portrayed as ‘victims’. This is a common propaganda
technique used by aggressor regimes and classes to justify the
unilateral exercise of brutality and repression.

In line with its global militarist-imperialist
ideology, Washington and its Venezuelan vassals have charged the
Venezuelan government with aiding and abetting ‘terrorists’, namely the
FARC insurgency in Colombia . Neither the Bush or Uribe regimes have
presented evidence of material aid to the FARC. As mentioned above, a
UN review of the Washington-Uribe charges against the Chavez government
have rejected every allegation. This fabrication is used to camouflage
the fact that US Special Forces and the Colombian armed forces have
been infiltrating armed paramilitary forces into Venezuela ’s poor
neighborhoods to establish footholds and block future barrio
mobilizations defending Chavez.

The Hard Power Campaign – Three Part Strategy: Economic Boycotts, Low Intensity Warfare and the Colombia Card

Complementing the propaganda campaign, Washington
has instumentalized a major oil producer (Exxon-Mobil) to reject a
negotiated compensation settlement, which would have left the US oil
giant with lucrative minority shares in one of the world’s biggest oil
fields (the Orinoco oil fields). All the other European oil companies
signed on to the new public-private oil contracts.41

When Exxon-Mobil demanded compensation, PDVSA made a
generous offer, which was abruptly rejected. When PDVSA agreed to
overseas arbitration, Exxon-Mobil abruptly secured court orders in the
US , Amsterdam and Great Britain ‘freezing’ PDVSA overseas assets. A
London court quickly threw out Exxon-Mobil’s case. As with other
countries’ experiences, such as Cuba in 1960, Chile in 1971-71 and Iran
in 1953, the oil majors act as a political instrument of US foreign
policy rather than as economic institutions respecting national
sovereignty. In this case, Washington has used Exxon-Mobil as an
instrument of psychological warfare – to heighten tensions and provide
their local vassals with an ‘incident’ which they can elaborate into
fear propaganda. The Venezuelan private media cite the threat of a US
oil boycott and evoke a scenario of a collapsing economy causing
starvation; they attribute this fantastic scene to the Chavez
government’s ‘provocation’. By evoking this illusion of US power and
Venezuelan impotence, they obfuscate the fact that the new oil
contracts will add billions of dollars to the Venezuelan Treasury,
which will benefit all Venezuelans.

US military strategy options have been severely
limited by its prolonged and open-ended wars in Iraq and Afghanistan
and its military-buildup threatening Iran . As a result, US military
strategy toward Venezuela involves a $6 billion dollar military
build-up of Colombia over the last eight years, including arms,
training, combat advisers, Special Forces, mercenaries and logistics.
US advisers encourage Colombian armed forces to engage in cross
frontier operations including the kidnapping of Venezuelan citizens,
armed assaults and paramilitary infiltration capped by the bombing in
Ecuador of a campsite of a FARC negotiating team preparing a prisoner
release. The US dual purpose of these low intensity military pressures
is to probe Venezuela ’s response, its capacity for military
mobilization, and to test the loyalties and allegiances of leading
intelligence officials and officers in the Venezuelan military. The US
has been involved in the infiltration of paramilitary and military
operatives into Venezuela , exploiting the easy entrance through the
border state of Zulia, the only state governed by the opposition, led
by Governor Rosales.

The third component of the military strategy is ‘to
integrate’ Venezuela’s armed forces into a ‘regional military command’
proposed by Brazilian President Lula da Silva and endorsed by US
Secretary of State Condeleeza Rice.42 Within that framework, Washington
could use its friendly and client generals to pressure Venezuela to
accept US military-political hegemony disguised as ‘regional’
initiatives. Unfortunately for Washington , Brazil ruled out a US
presence, at least for now.

The US military strategy toward Venezuela is highly
dependent on the Colombian Army’s defeat or containment of the
guerrillas and the re-conquest of the vast rural areas under insurgent
control. This would clear the way for Colombia ’s army to attack
Venezuela . A military attack would depend crucially on a sharp
political deterioration within Venezuela , based on the opposition
gaining control of key states and municipal offices in the up-coming
November elections. From advances in institutional positions Washington
’s vassals could undermine the popular national social, economic and
neighborhood programs.

Only when the ‘internal circumstances’ of polarized
disorder can create sufficient insecurity and undermine everyday
production, consumption and transport can the US planners consider
moving toward large-scale public confrontation and preparations for a
military attack. The US military strategists envision the final phase
of an air offensive -Special Forces intervention only when they can be
assured of a large-scale Colombian intervention, an internal
politico-military uprising and vacillating executive officials
unwilling to exercise emergency powers and mass military mobilization.
The US strategists require these stringent conditions because the
current regime in Washington is politically isolated and discredited,
the economy is in a deepening recession, and the budget deficit is
ballooning especially its military expenditures in Iraq and Afghanistan
. Only marginal extremists in the White House envision a direct
military assault in the immediate future. But that could change to the
degree that their vassals succeed in sowing domestic chaos and disorder.

Diplomatic and Economic Confrontation: Chavez
Versus Bush Diplomatically and economically, President Chavez has
gained the upper hand over the Bush Administration.

No country in Latin America supports Washington ’s
proposals to intervene, boycott or exclude Venezuela from regional
trade, investment or diplomatic forums. No country has broken
diplomatic, economic or political relations with Caracas – nor has the
US , despite strong moves in that direction by Bush in March 2008 (by
labeling Venezuela a ‘terrorist’ country). Even Washington ’s principal
vassal state, Colombia , shows no enthusiasm for shedding its $5
billion dollar food and oil trade with Venezuela to accommodate Bush.
Chavez has successfully challenged US hegemony in the Caribbean .
Through Petro-Caribe, numerous Caribbean and Central American states
receive heavily subsidized oil and petroleum products from Venezuela ,
along with socio-economic aid in exchange for a more favorable
diplomatic policy toward Caracas . The US no longer has an automatic
voting bloc in the region following its lead against a targeted country.

The Venezuelan government has successfully
contributed to the demise of the US-led Free Trade for the Americas
(ALCA) proposal and has substituted a new Latin American free trade
agreement (ALBA) with at least 6 member states. Venezuela ’s proposal
for a Latin American Bank of the South, to bypass the US influenced IDB
(BID) has been launched and has the backing of Brazil , Argentina and a
majority of the other Latin American states.43

Washington ’s arms embargo, that included Spain ,
has been a failure, as Venezuela turned to arms purchases from Russia
and elsewhere. Washington’s effort to discourage foreign investment,
especially in oil exploration is a complete failure, as China, Russia,
Europe, Iran and every major oil producer has invested or is currently
negotiating terms.

Despite vehement US opposition, Venezuela has
developed a strategic complementary link with Cuba , exchanging
subsidized oil and gas sales and large-scale investment for a vast
health service contract covering Venezuela ’s needs in all poor
neighborhoods.44 Venezuela has consolidated long-term finance and trade
ties with Argentina through the purchase of Argentine bonds, which the
latter has had difficulty selling given its conflict with the Paris
Club.

Venezuela had significantly improved its image in
Europe through Chavez’ positive role in mediating the release of FARC
prisoners while the US vassal Uribe regime is perceived in Europe as a
militaristic, dehumanized narco-driven entity. US militarism and its
economic crisis have led to a sharp decline in its image and prestige
in Europe , while eroding its economic empire and domestic living
standards. Chavez’ opposition to Bush’s global war on terror and his
calls for upholding human rights and social welfare has created a
favorable international image among the poor of the Third World and
within wide circles of public opinion elsewhere.

Vulnerability, Opportunities and Challenges
Presently and for the near future, Venezuela is vulnerable to attack on
several fronts. It is experiencing several internal contradictions.
Nevertheless it possesses strengths and great opportunities to advance
the process of economic and social transformation. Key weaknesses can
be located in the state, social economy and national security sectors.

In the sphere of politics, the basic issue is one of
democratic representation, articulation and implementation of popular
interests by elected and administrative officials. Too often one hears
among the Chavista masses in public and private discussions that, ‘We
support President Chavez and his policies but…’ and then follows a
litany of criticism of local mayors, ministry officials, governors and
Chavez’ ‘bad advisers’.45 Some – not all – of the elected officials are
running their campaign on the bases of traditional liberal clientele
politics, which reward the few electoral faithful at the expense of the
many. The key is to democratize the nomination process and not simply
assume that the incumbent in office – no matter how incompetent or
unpopular– should run for office again. Clearly the PSUV has to break
free from the personality-based electoral politics and establish
independent criteria, which respond to popular evaluations of
incumbents and party candidates. Communal councils need to be empowered
to evaluate, report and have a voice in judging inefficient ministries
and administrative agencies which fail to provide adequate services.46
The dead hand of the reactionary past is present in the practices,
personnel and paralysis of the existing administrative structures and
worst of all influences some of the new Chavista appointments.

The tactic of creating new parallel agencies to
overcome existing obstructionist bureaucracies will not work if the new
administrators are ill prepared (late or miss appointments, derelict in
rectifying problems, fail to meet commitments etc.). Nothing irritates
the Chavista masses more than to deal with officials who cannot fulfill
their commitments in a reasonable time frame. This is the general
source of mass discontent, political alienation and government
vulnerability. In part the issue is one of incompetent personnel and,
for the most part, the solution is structural – empowering popular
power organizations to chastise and oust ineffective and corrupt
officials.

In the economic sphere there is a need for a serious
re-thinking of the entire strategy in several areas. In place of
massive and largely wasted funding of small-scale cooperatives to be
run by the poor with little or no productive, managerial or even basic
bookkeeping skills, investment funds should be channeled into modern
middle and large scale factories which combine skilled managers and
workers as well as unskilled workers, producing goods which have high
demand in the domestic (and future foreign) markets. The new public
enterprise building 15,000 pre-fabricated houses is an example.

The second area of economic vulnerability is
agriculture where the Agriculture Ministry has been a major failure in
the development of food production (exemplified by the massive food
imports), distribution networks and above all in accelerating the
agrarian reform program. If any ministry cost Chavez to lose the
referendum, it was the Agriculture Ministry, which over 9 years has
failed to raise production, productivity and availability of food. The
past policies of controlling or de-controlling prices, of subsidies and
credits to the major big producers have been an abysmal failure. The
reason is obvious: The big land-owner recipients of the Government’s
generous agricultural credits and grants are not investing in
agricultural production, in raising cattle, purchasing new seeds, new
machinery, new dairy animals. They are transferring Government funding
into real estate, Government bonds, banking and speculative investment
funds or overseas. This illegal misallocation of Government finance is
abundantly evident in the gap between the high levels of government
finance to the self-styled agricultural ‘producers’ and the meager (or
even negative) growth of production-productivity on the large estates.47

In April 2008, President Chavez recognized that
fundamental changes in the use and ownership of productive land is the
only way to control the use of government credit, loans and investment
to ensure that the funds actually go into raising food and not
purchasing or investing in new luxury apartments or real estate
complexes or buying Argentine bonds. In March and April 2008, President
Chavez, with the backing of the major peasant movements and workers in
the food processing industry, expropriated 27 plantations, a meat
processing chain, a dairy producer and a major food distributor. Now
the challenge is to ensure that competent managers are appointed and
resourceful worker-peasant councils are elected to insure efficient
operations, new investments and equitable rewards. What is abundantly
clear is that President Chavez has recognized that capitalist ownership
even with government subsidies is incompatible with meeting the
consumer needs of the Venezuelan people.

Thirdly, as mentioned above, inflation is eroding
popular consumer power, fomenting wage demands by the unionized workers
in the export sector while eroding wages and income for contingent and
informal workers. The government has announced a decline in the rate of
inflation in January-February 2008 (2.1%). This is a positive
indication that urgent attention is being paid. The outrageous rates of
profit in both consumer and capital goods industries has increased the
circulation of excess money, while the lack of investment in raising
productivity and production has weakened supply. The inflationary
spiral is embedded in the structure of ownership of the major
capitalist enterprises and no amount of regulation of profit margins
will increase productivity. President Chavez moves into 2008 to
accelerate the socialist transformation through the nationalization of
strategic industries.

The key is to invest large sums of public capital in
a vast array of competitive public enterprises run with an
entrepreneurial vision under workers-engineers control. Relying on
‘incentives’ to private capitalists in order to increase productivity
has run afoul in most instances because of their rentier, instead of
entrepreneurial, behavior. When the government yields to one set of
business complaints by offering incentives, it only results in a series
of new excuses, blaming ‘pricing’, ‘insecurity’, ‘inflation’, and
‘imports’ for the lack of investment. Clearly counting on
public-private cooperation is a failed policy.

The basis of the psychological malaise of business
can be boiled down to one issue: They will not invest or produce even
in order to profit if it means supporting the Chavez government and
strengthening mass support via rising employment and workers’ income.48
They prefer to merely maintain their enterprises and raise prices in
order to increase their profits.

In the social sphere, the government faces the
problem of increasing political consciousness and above all encouraging
the organizing of its mass supporters into cohesive, disciplined and
class-conscious organizations. The government’s socialist project
depends on mass social organizations capable of advancing on the
economic elite and cleaning the neighborhoods of rightwing thugs,
gangsters and paramilitary agents of the Venezuelan oligarchs and the
Uribe regime.

The peasant movement, Ezequiel Zamora, is
establishing the kind of political-educational cadre schools necessary
to advance the agrarian reform. By pressuring the Agrarian Reform
Institute, by occupying uncultivated land, by resisting landlord gunmen
from Colombia , this emerging movement provides a small-scale model of
social action that the government should promote and multiply on a
national scale.

The principle obstacle is the counter revolutionary
role of the National Guard, led by General Arnaldo Carreño. He directed
a raid on the peasant training and educational school with attack
helicopters and 200 soldiers, arrested and beat educators and students
and wrecked the institute. No official action against the military
officers responsible for this heinous action was taken.49 Apart from
the reactionary and counter-revolutionary nature of this assault on one
of the most progressive Chavista movements, it is indicative of the
presence of a military sector committed to the big landlords and most
likely aligned to the Colombian-US military ‘golpistas’.

Labor legislation still lags. The new progressive
social security law is tied up in Congress and/or buried by the dead
hands of the Administration. Contingent (non-contracted, insecure)
workers still predominate in key industries like oil, steel, aluminum,
and manufacturing. The trade unions – both the pro-Chavez and the
plethora of competing tendencies and self-proclaimed ‘class unions’ –
are fragmented into a half dozen or more fractions, each attacking the
other and incapable of organizing the vast majority (over 80%) of
unorganized formal and informal workers. The result has been the
relative immobilization of important sectors of the working class faced
with big national challenges, such as the 12/2 referendum, the
Colombian-US military threats and the struggle to extend the agrarian
reform, public enterprises and social security.

The government’s relative neglect of the organized
and unorganized manufacturing workers has changed dramatically for the
better, beginning in the first half of 2008. President Chavez’ forceful
intervention in the steel (Techint Sidor), cement (CEMEX), meatpacking
and sugar industries has led to massive outpouring of worker support. A
certain dialectic has unfolded, in which militant worker conflicts and
strikes against intransigent employers has induced President Chavez to
intervene on their behalf, which in turn has activated the spread and
depth of worker and trade union support for President Chavez. This
dialectic of reinforced mutual support has led to meetings of
inter-sector union leaders and militants from the transport,
metallurgic, food processing and related industries. In response to
increased trade union organized support, Chavez has raised the prospect
of nationalizing banks and the rest of the food production and
distribution chain. Much depends upon the unification and mobilization
of the trade union leaders and their capacity to overcome their
sectarian and personalistic divisions and turn toward organizing the
unorganized contingent and informal workers.

The sectarianism of the ultra-leftist sects and
their supporters among a few trade union bureaucrats leads them to see
Chavez and his government and trade union supporters as ‘the main
enemy’ leading them to strike for exorbitant pay increases. They
organize street blockades to provoke ‘repression’ and then call for
‘worker solidarity’. Most of the time they have had little success as
most workers ignore their calls for ‘solidarity’. The unification of
pro-Chavez union leaders around the current nationalizations and the
growth of a powerful unified workers’ trade union movement will isolate
the sects and limit their role. A unified working class movement could
accelerate the struggle for social transformation of industry. It would
strengthen the national defense of the transformative process in times
of danger.

The National Security Threats The multi-country
surveys reveal that most people in almost all countries think the US is
the biggest threat to world peace. This is especially the case in
Venezuela, a Caribbean country which has already been subject to a
US-backed and orchestrated coup attempt, a employers and executives
lockout of the vital petroleum industry, a US-financed
recall-referendum, an international campaign to block the sale of
defensive weapons and spare parts accompanied by a massive sustained
military build-up of Colombia, its surrogate in the region. The violent
efforts of the US to overthrow President Chavez have a long and ugly
pedigree in the Caribbean and Central America . Over the past half
century the US has directly invaded or attacked Guatemala, Panama,
Cuba, the Dominican Republic, Grenada, Nicaragua and El Salvador; it
organized death squads and counter revolutionary surrogate armies n
Guatemala, El Salvador, Nicaragua and Honduras, which murdered nearly
300,000 people.50

The US assault against Venezuela includes many of
the strategies applied in its previous murderous interventions. Like in
Guatemala , it has and continues to bribe, cajole and subvert
individuals in the Venezuelan military and among National Guard
officers. Their plan is to use Venezuelan military officials to
organize a coup, collaborate with Colombian cross border infiltrators
and to encourage defections to the pro-US opposition. Like in Central
American , US operatives have organized death squad killers to
infiltrate the Venezuelan countryside to attack peasant movements
pursuing land reform and to consolidate support among big landowners.

Like in Nicaragua , the US is combining support for
the systematic sabotage of the economy by the business elite to foment
discontent while financing opposition electoral campaigns to exploit
the unstable economic circumstances. Like its economic blockade of
Cuba, the US has organized a de facto arms and parts embargo as well as
an international ‘freeze’ on Venezuela’s PDVSA overseas assets through
international court processes initiated by Exxon-Mobil. Colombia ’s
cross-border bombing of Ecuador is as much a ‘test’ of Venezuela ’s
preparedness as it is an overt aggression against Ecuador ’s President
Correa’s nationalist government’s cancellation of the strategic US
military base in Manta ( Ecuador ).

Venezuela had taken several measures to counter the
US-Colombian-Venezuelan Fifth Column threats to national security.
Following the coup President Chavez ousted several hundred military
officers involved in the overthrow and promoted officers loyal to the
constitution. Unfortunately the new group included several pro-US and
anti-leftist officers open to CIA bribes, one of whom even became the
Minister of Defense before he was ‘retired’ – and became a virulent
spokesperson against Chavez’ transformative referendum.51 Worse still,
Chavez amnestied the military and civilian coup makers and economic
‘lock-out’ saboteurs after they had served only a small fraction of
their sentences – to the utter shock and dismay of the mass of popular
forces that shouldered the burden of their violent coup and economic
sabotage and who were not consulted.

Venezuela has purchased some light weapons (100,000
rifles and machine guns) and a dozen submarines from Russia and
helicopters from Brazil to counter Colombia ’s $6 billion dollar light
and heavy arms build-up. Clearly that is a step forward, but it is
still inadequate given the massive arms deficit between the two
countries. Venezuela needs to rapidly build up its ground to air
defenses, modernize its fighter jets and naval fleet, upgrade its
airborne battalions and vastly improve its ground forces capacity to
engage in jungle and ground fighting. Colombia ’s army, after 45 years
of counter-insurgency, has the training and experience lacking in
Venezuela . Venezuela has taken positive steps toward organizing a mass
popular militia – but the advances have a very mixed record, as
training and enlistment lag far below expectations for lack of
political organization and politico-military leadership.

While President Chavez has taken important steps to
strengthen border defenses, the same cannot be said about internal
defenses. In particular, several generals in the National Guard have
been more aggressively dislodging peasant land occupiers than in
hunting down and arresting landlord-financed gunmen who have murdered
200 peasant activists and land reform beneficiaries. Extensive
interviews with peasant leaders and activists indicate active
collaboration between high military officers and right-wing cattle
barons, calling into question the political loyalties of rural based
Guard garrisons.

There is an urgent need to accelerate the
expropriation of big estates and to arm and train peasant militias to
counter-act Guard complicity or negligence in the face of
landlord-sponsored violence. There are thousands of peasants ready and
willing to enlist in militias because they have a direct stake in
defending their families, comrades and their land from the ongoing
paramilitary attacks.

Today the most immediate and enduring threat to
internal security takes the form of a blend between a mass of hardened
Venezuelan criminal gangs and narco-paramilitary infiltrators from
Colombia , which are terrorizing the populace in low income
neighborhoods. Police investigations, arrests and government
prosecution are inadequate, incompetent, and corrupt and occasionally
point to complicity. To this day the infamous broad daylight
assassination of the respected Attorney General Danilo Anderson has not
been solved and the current Attorney General has essentially buried the
investigation and, even more importantly, buried the investigation into
the economic elite networks planning future coups that Anderson was
carrying out at the time of his murder.

Anderson was the chief investigator of the forces
behind the April 2002 failed coup, the economic sabotage and a series
of political assassinations. Venezuelans close to the case state that
Anderson had compiled extensive documentation and testimony implicating
top opposition political, economic and media figures and some
influential figures in the Chavez administration. With his death, the
investigations came to an end, no new arrests were made and those
already arrested were subsequently granted amnesties. Some of Anderson
’s top suspects are now operating in strategic sectors of the economy.
There are two hypotheses: Either sheer incompetence within the office
of the new Attorney General, the Ministry of Justice and related
agencies of government has derailed the investigation; or there is
political complicity on the part of high officials to prevent
undermining the present socialization strategy. In either case the
weakness of law enforcement, especially with regard to a dangerous
capitalist class operating an extensive network supporting the violent
overthrow of the elected government, opens the door to a re-play of
another coup. Indeed the amnesty of the elite coup-makers and economic
saboteurs and the case of Danilo Anderson weighs heavily on the minds
of militant Venezuelans who see it as an example of the continued
impunity of the elite.

Factory and anti-crime ‘neighborhood watches’ and
defense militias are of the utmost importance given the rising internal
and external national security threats and crime wave. With the greater
cooperation of communal councils, sweeps of local gangs is a top
priority. Neighborhood police and militia stations must saturate the
poor neighborhoods. Large-scale lighting must be established to make
streets and sidewalks of the ranchos safer. The war against drug
traffic must delve into their bourgeois collaborators, bankers and real
estate operators who launder money and use illegal funds to finance
opposition activities. Petty and youth delinquents should be sentenced
to vocational training programs and supervised rural and community
service. Large-scale illegal financial transactions must be prosecuted
by the confiscation of bank accounts and property. National and
internal security is the sine quo non of maintaining any political
order dedicated to transforming the socio-economic system.

On April 9, 2008 President Chavez took a major step
toward reducing crime, strengthening community-police relations and
improving the security of the people by passing a National Police Law
through presidential law decree. Under the new law, a new national
revolutionary police of the people will be established ‘demolishing the
old repressive police model with education, conscience, social
organization and prevention’. He contrasted the past capitalist police
who abused the poor with the new communal police who will be close to
the citizens and dialogue oriented. To that end the newly formed
communal councils will be encouraged to join and help select a new type
of police based on rigorous selection process and on their willingness
to live and work with the neighborhood. The PSUV and the communal
councils will become the backbone of creating the new political
solidarity with the newly trained police from the neighborhoods.
Chavez’ recognition of the security issue in all its political and
personal dimensions and his pursuit of democratic and egalitarian
approach highlights his commitment to both maintaining law and order
and advancing the revolutionary process.52

Conclusion: Advantages and Opportunities for Socialist Transformation

Venezuela today possesses the most advantageous
economic, political and social conditions for a socialist
transformation in recent history despite the US military threats, its
administrative weaknesses and political institutional limitations.

Economically, Venezuela’s economy is booming at 9%
growth, world prices for exports are at record levels (with oil at over
$100 a barrel), it has immense energy reserves, $35 billion dollars in
foreign exchange reserves and it is diversifying its overseas markets,
although much too slow for its own security.53 With the introduction in
April 2008 of an excess profit tax which will take 50% of all revenues
over $70 dollars a barrel and an additional 60% of all revenues over
$100 a barrel, several billion dollars in additional income will swell
the funds for financing the nationalization of all strategic sectors of
the economy.

Venezuela benefits from a multi-polar economic world
eager to purchase and invest in the country. Venezuela is in the best
possible condition to upgrade the petroleum industry and manufacture
dozens of downstream petrochemical products from plastics to
fertilizers – if public investment is efficiently and rationally
planned and implemented. Venezuela has over a million productive
landless workers and small farmers ready and willing to put the vast
tracts of oligarch-owned under-utilized lands to work and put Venezuela
on the road to food self-sufficiency – if not an agro-exporting
country. Millions more hardworking Colombian refugee-peasants are eager
to work the land along side their Venezuelan counterparts. There is no
shortage of fertile land, farmers or investment capital. What is needed
is the political will to organize expropriations, cultivation and
distribution.

Politically, President Chavez provides dynamic
leadership backed by legislative and executive power, capable of
mobilizing the vast majority of the urban and rural poor, organized and
unorganized workers and youth. The majority of the military and the new
academy graduates have (at least up to now) backed the government’s
programs and resisted the bribes and enticements of US agents. New
Bolivarian-socialist military instructors and curricula and the
expulsion of US military ‘missions’ will strengthen the democratic link
between the military and the popular government.

The intelligence and counter-intelligence services
have detected some subversive plots but remain the weakest link both in
terms of information collecting, direct action against US-Colombian
infiltration, detecting new coup plans and providing detailed
documentation to expose US-Colombian assassination teams. Clearly
housecleaning of dubious and incompetent elements in the intelligence
agencies is in order. New training and recruitment processes are
proceeding, rather slowly and have to demonstrate competence.

Socially the Chavez government retains the support
of over 65% of the electorate and nearly 50% of the people were in
favor of an overtly socialist agenda in the referendum of December 2,
2007. If the communal councils take off, and the militias gain
substance and organization and if the PSUV develops mass roots and the
popular nationalization accelerates, the government could consolidate
its mass support into a formidable organized force to secure a huge
majority in a new referendum and to counter the US-backed
counter-revolution.

A lot will depend on the government’s deepening and
extending its social-economic transformation – increasing new public
housing from 40,000 to 100,000 a year; reducing the informal labor
sector to single digits and encouraging the trade unions to organize
the 80% of the unorganized labor force into class unions with the help
of new labor legislation.

Given the availability of mass social support, given
the high export earnings, given the positive social changes, which have
occurred, the objective basis for the successful organization of a
powerful pro-socialist, pro-Chavez movement exists today.

The challenge is the subjective factor: The
shortages of well trained cadres, political education linked to local
organizing, the elaboration of a socialist political-ideological
framework and the elimination of personality-based liberal patronage
officials in leading administrative and party offices. Within the mass
Chavista base, the struggle for a socialist consciousness is the
central challenge in Venezuela today.

NOTES

1 Weisbrot, Mark and Luis Sandoval 2008, “Update:
The Venezuelan Economy in the Chavez Years”, Washington D.C. Center for
Economic and Policy Research.

2 Mark Weisbrot, “An Empty Research Agenda: The
Creation of Myths About Venezuela :, March 2008. Center for Economic
and Policy Research, Washington D.C.

3 Ibid. Also see “Letter From Venezuela’s
Communication Minister to the Washington Post”, March 26, 2008 by
Andres Izarra printed on March 28, 2008.

4 A good example can be found in the Socialist
Register 2008. For an example of rampant propaganda disguised as
‘scholarship, see Francisco Rodriguez, “An Empty Revolution: The
Unfulfilled Promises of Hugo Chavez”, Foreign Affairs March/April 2008.

5 Weisbrot, Op cit page 10.

6 Weisbrot, Op cit

7 Interview with peasant leaders of the Frente
Nacional Campesino Eqzquiel Zamora in Caracas , Feb. 27, 2008. Boston
Globe April 11, 2008

8 Interview with President Chavez, Caracas , March 2,2008

9 Dario Vea, February 25, 2008 p.2

10 Interview with President Chavez, March 2, 2008

11 Weisbrot, Op cit

12 Hyperinflation brought down the social democratic
Alfonsin regimes in Argentina (1989) and Garcia in Peru (1990);
weakened the Allende regime in 1973 and led to right wing take over.
Hyperinflation has also led to the collapse of right wing regimes in
China (1945-49) and the rise of Communism as well as regime change in
Brazil in the 1990’s.

13 Reuters News Service April 9, 2008; BBC News April 2, 2008.

14 “La grave represion de los trabajadores siderúgicos” Argenpress March 24, 2008.

15 El Universal, March 5, 2008. page 1.

16 Izarra, Op cit

17 ‘Partido Socialista Unido de Venezuela: Herramiento de Masas in Gestión’, Rebelion, March 25, 2008.

18 ibid

19 Interview in Caracas with PSUV delegates, March 1, 2008.

20 Interviews and meetings of neighborhood delegates of Communal Councils, February 29, 2008.

21 Interview with Minister of the Interior Ramon Rodriguez Chacun, La Jornada, March 31, 2008.

22 Interview with Communal Councils, February 29,
2008. According to a poll by the respected polling group, Barometro, in
early April 2008, 66.5% of Venezuelans approved Chavez presidency.

23 Commentaries from Communal Council delegates and
peasant activists in Caracas , ‘Popular Power Meeting’ at the Ministry
of Culture and Popular Power. February 29, 2008

24 Interview with Carmen Boqueron, Ministry of Culture, February 25, 2008.

25 Interview with Miquel Marquez, President Editorial El Perro y la Rana, State Publishing House, March 5, 2008.

26 See La Plena Voz, Memórias, Política Exterior y Soberania, among other magazines.

27 Interview with Carmen Boquerón, February 26, 2008

28 Interview with Minister of Culture, March 1, 2008.

29 Interview February 29, 2008. Even at the new
Bolivarian Universities, only a minority of working class students are
involved in political activities, most concentrate on their studies and
future job prospects. However among active students at the new
universities, the great majority are pro-Chavez.

30 From the beginning of the first nationalization
in 1976 under President Carlos Andres Perez, the fundamental question
was ‘nationalization for whom?’ In the 1970’s to the re-privatizations,
the answer was the wealthy elites. See James Petras, Morris Morley and
Steven Smith, The Nationalization fof Venezuelan Oil, (New York Praeger
Press. 1977)

31 Eva Golinger’s detailed documentary study based
on files secured from the US Government through the Freedom of
Information Act which provide ample evidence of US intervention.

32 Interview with Venezuelan Presidential adviser, Paris November 2001.

33 www.rebelion.org April 13, 2002

34 Weisbrot Op cit

35 Eva Golinger, The Chavez Code: Cracking US
Intervention in Venezuela ( Havana : Cuba Book Institute 2005).
Golinger provides extensive documentation of US financing of the
self-styled NGO’s through AID and NED (National Endowment for
Democracy, a government conduit for destabilizing regimes critical of
the US ).

36 For a more detailed analysis, see James Petras “El referendo Venezolano: analisis y epilogo”, www.rebellion.org Dec 17, 2007.

37 The phrase ‘soft power’ is credited to Harvard
political science professor and long time US presidential adviser,
Joseph Nye, who offers his expertise on empire management and the uses
of imperial power. See Joseph Nye, Soft Power: The Means to Success in
World Politics 2004

38 Venezuelan drug interdiction has captured 360
tons of drugs between 2000-2007, according to the National Anti-Drug
Office, January 2008.

39 On the Colombian State ’s mass terror, see the
annual reports of the International Labor Organization, Via Campesino,
Human Rights Watch and Amnesty International.

40 Interview with peasant leaders from the Frente Nacional Campesino Ezequiel Zamora, February 27, 2008.

41 Throughout the dispute between Exxon-Mobil and
the PDVSA, the European press sided with their more conciliatory
multi-nationals while the Washington Post, NY Times and Wall Street
Journal engaged in vituperative attacks on Venezuela .

42 While Condeleeza Rice gave her backing to the
‘Regional Command’, Lula immediately informed her that the US was not
part of it.

43 The Bank of the South is already financing
development projects without the usual onerous conditions imposed by
the World Bank and IMF.

44 In interviews with both Fidel Castro (Feb 10,
2006 Havana ) and with Hugo Chavez (March 2, 2008) both confirm the
long-term, large-scale ties, which bind them in a strategic alliance.

45 The testimony of a militant female peasant leader
at a meeting organized by the Ministry of Popular Power was very
demonstrative: ‘We support President Chavez; we defend President
Chavez; but he has to replace those incompetent officials in the
ministry who fail to provide us with credit so we can buy seed and
fertilizer in time to plant our crops.’ February 27, 2008. Ministry of
Popular Power

46 While I have noticed improvements in the
punctuality and preparation of more agency officials, there are still
too many highly placed functionaries who fail to keep appointments,
comply with their professional responsibilities or inform themselves
about the subject matter of their ministries.

47 The anti-production behavior of the big land
owners and cattle barons has been the practice for decades. Back in the
mid-1970’s, President Carlos Andres Perez also pumped hundreds of
millions into ‘making Venezuela food self-sufficient’ in a program he
called ‘ploughing the oil wealth into agriculture’ with the same
miserable results as the present. The reason is clear, many of the big
landlords are the same people. The lessons from the past are very
clear: As long as the present government tries to develop agriculture
through the existing land owners it is doomed to repeat the failures of
the past.

48 Interview with an oil executive from British Petroleum, Caracas , March 6, 2008.

49 ‘El Frente Nacional Campesino Ezequiel Zamora es atacado por militares’ March 22, 2008 report from the FNCEZ.

50 See Petras and Morley, Empire or Republic (NY Routledge 1995).

51 General Baduel was always a virulent
anti-communist who is said to have received a seven-figure payoff and
threats of exposure of unseemly personal revelations if he didn’t
‘turn’ against Chavez.

52 James Suggett, “Venezuela Passes National Police Law”, www.venezuelanalysis.com April 11, 2008.

53 See Weisbrot, Op cit